Time To Move On VIX?

Mark Sebastian

The Option Pit VIX Traffic Light Is Yellow: Volatility is likely to move.

Hey Traders,

The Option Pit VIX Traffic Light is still yellow … but only barely.

It is teetering on turning red … but we are not quite there yet.

In the meantime, it looks like traders are starting to enter the VIX pits once again.

Is it time to make a move on VIX?

Traders seem to be taking advantage of the low VIX, and low VIX of VIX, VVIX, to finally put on some hedges.

Notably, we saw 17,812 November-dated 40/60-strike call spreads …

An August/September call ratio …

And has VVIX finally hit a bottom?

Currently, it looks as though it may be tentatively creeping higher …

Add to that the steep contango between the July and August futures …

In spite of July still having a week until expiration.

Signs are starting to point to falling vol in the near-term …

And options are still cheap.

Now might be a good time to make a move.

Your Only Option,

Mark Sebastian

VIX Edge

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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